Condoleezza Rice, the US secretary of state, said that her country had enhanced its presence in the Gulf and would not hesitate to defend itself or allies in the region.

She said it was time for Iran to "get on the right side of the international community".

"It ought to be talking about that, not about threats against America or threats against America's allies because frankly it's not going to do them any good," she said.

As Iranian television showed footage of the missile tests and naval manoeuvres, Israel unveiled an aircraft it said could carry out spying missions undetected.

Ehud Barak, Israel's defence minister, told Israeli public radio that his country was ready to respond to any threat from Tehran.

"Israel is the strongest country in the region and we have already shown in the past that we are not afraid of acting when our vital interests are threatened," he said.

'Set on fire'

On Tuesday, the first day of war games, an aide to Ayatollah Ali Khamenei, Iran's supreme leader, said the country would "set on fire" Israel and the US navy in the Gulf as its first response to any attack.

Earlier this month it emerged that Israel had carried out manoeuvres in the Mediterranean which appeared to be practices for a potential strike against Iranian nuclear facilities.

The US accuses Iran of covertly seeking to develop nuclear weapons, a charge that Tehran vehemently denies. Iran says its nuclear programme is aimed at civilian energy production.

Diplomats are currently looking at Tehran's response to a package of incentives offered to persuade it to halt urnaium enrichment.